Adan Abdow Hassan v Hans Kenya Limited [2019] KEELRC 489 (KLR)
The bottom line
#A Kenyan court ruled a security guard's layoff was unfairly handled because the employer skipped mandatory redundancy notice steps, awarding him over Kshs.128,000.
What this practically means
#Executive summary
#Key legal issues
#Whether the termination was on account of redundancy and whether the reason was valid and fair
The termination was a redundancy; the reason (outsourcing of security services) was valid and fair, founded on managerial prerogative and operational requirements
The termination letter cited a 'change of guards' and the original defence pleaded redundancy. The court agreed with the labour officer's opinion that outsourcing abolished the claimant's position of internal guard. Redundancy under section 2 of the Employment Act covers loss of employment where services are superfluous, including abolition of office. The decision to outsource was a managerial prerogative not maliciously targeted at the claimant, so the reason passed the substantive limb of the section 45 test.
Whether the redundancy procedure was fair under section 40 of the Employment Act
The procedure was unfair; the mandatory requirements of section 40 were not complied with
Section 40 requires the employer to serve the employee and the area labour officer with at least one month's notice of the intended redundancy, and to pay severance pay, one month's salary in lieu of notice and accrued leave. None of these was done; the respondent only tendered a cheque of Kshs.25,520 which the claimant refused. Non-compliance with the mandatory statutory procedure rendered the otherwise validly-grounded termination unfair under section 45.
Whether the claimant was entitled to the reliefs sought, including underpayment, leave, severance, overtime and certificate of service
Notice pay, 6 months' compensation, underpayment for June 2012 to April 2013, 6 days' leave and certificate of service granted; severance and overtime refused
Under section 49(1) the court awarded one month's notice and 6 months' compensation based on the 2015 minimum wage of Kshs.527.10 per day. Underpayment was proved only for the period when the contractual rate of Kshs.365 fell below the statutory Kshs.412.80 under Legal Notice No.71 of 2012. Six days' leave was uncontroverted by leave records. Severance was refused to avoid double compensation, and overtime failed against clock-in records showing 8.30am to about 5.30pm attendance.
Legal principles established
#- Redundancy and lay off mean the same thing; a termination arising from a decision to outsource services is a redundancy under section 2 of the Employment Act
- An employer's decision to outsource services is a valid and fair reason for redundancy based on operational requirements, being a managerial prerogative
- An employee engaged on casual/daily wages whose service is prolonged is converted by section 37 of the Employment Act to an employee employed on monthly terms
- Failure to comply with the mandatory procedure under section 40 of the Employment Act (one month's notice to employee and labour officer, severance pay, notice pay and accrued leave) renders a redundancy unfair under section 45
- A party alleging underpayment must adduce documentary evidence such as payslips or payment vouchers to prove the actual earnings
Court orders
#- 1.Judgment entered for the claimant against the respondent for Notice Kshs.15,813.00, Compensation Kshs.94,878.00, Underpayment Kshs.14,340.00 and Leave Kshs.3,162.60, total Kshs.128,193.60
- 2.Award subject to statutory deductions but in addition to costs plus interest at court rates from the date of the judgment
- 3.Claimant granted a certificate of service under section 51 of the Employment Act
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over a trade dispute (Employment Act and Labour Relations Act); not expressly stated in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Adan Abdow Hassan v Hans Kenya Limited [2019] KEELRC 489 (KLR)", Case Analysis (2019). Cause No 2276 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/489/eng@2019-11-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.